Smart Banking Guide

• “Crossing” a cheque is a way of making even more certain that the money is paid to the correct person and not to someone else. By “crossing” the cheque in the ways that follow, you give the bank extra instructions about how it is to be paid. This is called limiting its negotiability.

• If you draw a line to cross out the words “or bearer”, then you are telling the bank that the money cannot just be paid out to anyone who happens to present the cheque. It must be paid out to the person named on the “Pay” line. It is possible to get around this by “endorsing” the cheque. This means that the person to whom the cheque is made out signs the back thus giving their permission for it to be presented for payment.

• If you cross out “to bearer” and draw two parallel lines across the front of the cheque (usually the top left corner is sufficient) then you are telling the bank that the money has to be paid into an account and cannot be cashed (exchanged for cash). This means that the person who eventually receives the money can be traced because there will be a record of the deposit. This kind of crossing, with or without the words “non-negotiable” in between the lines means that the cheque must be “endorsed” before it is paid into an account belonging to anyone other than the person or company named on the “Pay” line. This is called a general crossing.

For instance, if you make out a cheque to “Woolworths”, they will still be able to deposit it into their account provided the cheque is endorsed by one of their managers who is authorised to do this. Similarly, if you make out a cheque to Mrs E. Harper but she wants to pay the cheque into her business account which is held in the name “Country Cotton“, she should write on the back “pay to Country Cotton” and sign and she can then make the deposit.

• If the “to bearer” is not crossed out, then even if the cheque is crossed, it can still be cashed provided it has been endorsed.

• If you write the words “Not transferable” between the lines, then the cheque can only be paid into a bank account held in exactly the same name as written on the “Pay” line.

For example, if you make out a cheque to “Edgars” but the correct name is “Edgars “, they will be unable to deposit it into their account. They will have to return the cheque to you for correction.

About two thirds of the way through each book there is a page to warn you that you will soon run out and which you can use to collect your next cheque book from the bank You can arrange to collect your cheque book from a branch other than the one where your account is held but you must do this well in advance of the day you want to collect it.